California's Economy Turning the Corner

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It's a baby step, but still a step in the right direction: California's unemployment rate fell to 11.9 percent in September from 12.1 percent in August. In the process, the state added 11,800 jobs, bringing the total for 2011 to just under 140,000.

These numbers are hardly robust, but they suggest the possibility that California is climbing out of the economic hole the state has occupied for the past three years.

Over that time, the state budget has been pared by one-third, forcing drastic cuts in every area from public education to in-home services for the aged and infirm.

Local governments have been hit particularly hard as well. Still, the new employment data couldn't come at a better time because time is not on the side of the state budget.

The budget for the 2011-2012 fiscal year calls for revenues of $4 billion more than the amount anticipated by the Legislative Analyst.

Revenues for the first three months of the fiscal year are $700 million below those projections, leaving many to fear massive cut-backs beyond the massive cut-backs that have already taken place. You can't spend money if you don't have it because California, unlike the federal government, must operate with a balanced budget.

But for the moment, there is a glimmer of hope.

Each one of those new employees is collecting a pay check, which means that most will be paying state and local taxes. Moreover, many of these new employees will no longer be collecting unemployment, which reduces the state outlay.

Of course, one month is just that--one month. California's unemployment rate remains stubbornly high, in fact the second highest of the fifty states. But at least there's some hope, and these days, we'll take all the hope we can get.